Top tips to help you achieve financial freedom: Part Three

Wed May 30th 2018

We are half way through our week of financial wellness tips, and even if you have only been able to make use of some of them you’re in a better position than you were at the start of the week!
Today we aim to make you a sensible spender…
The temptation to spend is everywhere and for many of us, it’s a hard one to resist. However, we are here to share our best tips on how to resist temptation, help you learn the difference between ‘want’ and ‘need’, and offer advice on how to limit those ‘impulse’ purchases.

Surprisingly, there is research to suggest that we are actually born with our spending habits – some of us are naturally savvy with money and good savers, whilst others were born to shop.

If you fall into the latter group, saving can be one of the most challenging tasks you take on. If you have taken the first step to curbing your spending, that's great, but any lapse in willpower can mean takings two steps backwards.

For many, there is an emotional connection with money. Those who are frugal thrive in seeing their savings grow and feel a sense of achievement, whilst splurgers are constantly fighting the overwhelming urge to buy something – anything-after which they often feel guilty. Here we look at ways of suppressing that urge to spend, whilst still making it ok to enjoy the odd purchase here and there!

Don't forget to look back at parts one and two for more ideas on how to change your money mindset!

35: Save or splurge

We all like to splurge now and then. But spending too much money on the wrong things can be a financial disaster – even if they're relatively low cost. This comes down to priortising again - is it really important to have that $5 cup of coffee every morning, or could you brew your own at home? Do you really need new shoes every season, or are the ones you have fine?

36: Set spending limits

Temptation is everywhere. And unless you have an iron will, you probably give in now and then, and buy something you don't really need. Giving yourself a weekly or monthly spending limit for extras is one way to keep this impulse under control – if you've reached your limit, you're more likely to bring lunch from home rather than buying that $12 salad.

37: Separate needs and wants

Knowing the difference between needs and wants can help reduce spend. Of course, food is a need – but gourmet food and eating out are wants. A cellphone is a need, but the latest iPhone is a want.

38: Spend less than you earn

It seems obvious, but you can't spend money you don't have. It's usually easier to cut down on spending than it is to earn more money.

39: Cut down on unnecessary costs

Reducing expenses shouldn't just mean fewer coffees and dinners out – you should also evaluate your regular outgoings to find out where you can save some cash. You might be paying too much for your phone or internet, paying for TV you don't even watch, or using an expensive power provider.

40: Be honest with yourself

When you're budgeting, it's important to be realistic. If you spend $400 a month on groceries, don't round it down to $350 - it's pointless otherwise.

41: Buy better

Cheaper isn't always better. Quality products may be more expensive, but they'll usually last longer and work better, so buying the cheaper version may be a false economy.

42: Cold hard cash

One way to stick to a limited budget is by using cash only. You'll avoid fees and credit card charges, and know exactly when your weekly or monthly budget is about to run out. Using cash is also more tangible, which can help you think twice about spending.

43: Seek out sales

Some people love bargain hunting, but even if you don't, it's worth shopping around to find the best price when you make a purchase. This is particularly true for larger purchases – like appliances. You can often find what you want at a reduced price, or even ask for a discount in store.

44: The two-day rule.

A good way to limit impulse buying is to impose a two-day rule. Think about a purchase for two days before you buy. This will give you time to research other prices, and to consider whether you really need after all.

Why not use our handy Budget Planner so you can see where your money really goes?

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